Loss of funds for Europe’s outermost regions ‘unacceptable’

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Leaders from Europe’s Outermost Regions have expressed their dissatisfaction with the Commission's new strategy which slashes their funding in half.

The Outermost Regions comprise eight far-flung territories belonging to three EU countries – the Canary Islands (Spain); the Azores and Madeira (Portugal); and Martinique, Guadeloupe, French Guiana, Réunion and Saint Martin (France).

Commission President José Manuel Barroso, who opened the second Outermost Regions Forum on Monday (2 July), committed his “personal engagement” in the regions and promised Brussels would continue to “invest in their green growth”. He said the Commission will work to develop the regions' strengths, making use of their singular geographic position.

Barroso, however, added that support would come at a price, saying that cohesion is “not a favour” and that the new Outermost Regions special budget would be “ambitious” but “realistic.”

Regional representatives were clear in their assessment of this new “realistic” budget, which would see the special funding they receive on top of regular regional funds cut by 45%. According to Canary Islands President Paulino Rivero Baute, this figure translates for his island of 2.1 million people to a reduction from €36 to €23 per person.

"An urgent or emergency plan is needed," he said.

Portuguese Deputy Secretary of State Luis Leitao also called the proposed funding cuts “unacceptable,” while Guiana Regional Council President Rodolphe Alexandre described the budget as “in no way satisfying.”

Commissioner for Regional Policy Johannes Hahn, who is Austrian, joked about whether “the man from the Alps could understand the people from the islands.” After these latest budget cuts, the regional leaders may be asking themselves the same question.

High unemployment

Baute said that previous Commission proposals “were not taking hold” in the Outermost Regions, where unemployment levels, especially among the youth, remain staggeringly high.

For Guiana unemployment is 32%, three times the European Union's average. Leaders quoted 30% for the Canary Islands and Martinique, where the figure stands at 62% among under-27s.

Local leaders blamed the “handicap” of being a far-off region for their lack of development, which is poor by European standards. For example,  inadequate infrastructure has seen Guiana’s population struggle to obtain basic amenities, such as access to electricity and drinkable water.

Some of the regions, which are archipelagos, spend much of their special budget allocation on transport and communications.

Outermost Regions leaders say they are crippled by the distance from the single market and that they are finding investment hard to come due to their “unattractive” economies, which they say are in dire need of modernisation.

Azores President Carlos César lamented the few alternatives to traditional trade, such agriculture and fisheries, calling for the EU aid to help their economies diversify into high added-value sectors.

Commission: Regions need to stand on their own feet

Barroso said the dream for the remote regions was that one day they would not need a special budget allocation and that they would be able to contribute more revenue to the EU.

Commissioner Hahn admitted that there was “much work to do in these regions” and said the best instrument for achieving their 2020 sustainable development targets was cohesion policy with “tailor-made solutions.”

According to the EU executive, these regions should focus on their strengths, such as the “richness of their marine environment, biodiversity, human capital and their development potential in emerging areas such as energy, food or applied research.”

Hahn said the Commission will attempt to increase the regions' competitiveness by giving smaller businesses access to finance for communication and transport.

The EU executive tried to include a clause in the latest Outermost Regions budget requiring the regions to use their special funding allocation on innovative investments.

But EU countries have dismissed that clause, over protests from regional leaders that the money would be better suited to projects such as alleviating crippling transport and communication costs through subsidies.

Speaking at Second Forum on the Outermost Regions, Commission President José Manuel Barroso said the EU must “promote their assets” and aid their development through project bonds or structural funds.

Commissioner for Regional Policy Johannes Hahn emphasised that the regions had “geographical possibilities to explore.”

Portuguese Deputy-Secretary of State Luis Leitao called the 50% cut in funding to the Portuguese ORs “unacceptable” and warned that they were “particularly exposed” to economic problems.

Ambassador and Permanent Representative of Spain to the EU Alfonso Quecedo said his government “places great importance” on their Outermost Regions and called on the development of their “social aspects”.

Guiana’s Regional Council President Rodolphe Alexandre said Guiana needed to “catch up in infrastructure” and tackle unemployment. He said his region was “essential in added value for Europe”, especially due to its long border with Brazil.

Réunion’s Regional Council President Didier Robert said the Forum on the Outermost Regions was “a major step” but said that he could “not accept” the conclusions of the first meeting on the regions. He called on the Commission to modify its proposal.

President of Martinique’s Regional Council, Serge Letchimy, said his region was satisfied with the EU’s general programmes, for example in energy, but called on the Commission to “make the right conclusions” and find ways to protect his community and tackle high unemployment levels.

Eight European Union regions are defined as outermost regions. The status award qualifies these regions for special treatment, recognising their specific and permanent constraints, such as their remoteness from continental Europe, insularity, small size, difficult topography and climate, and economic dependence on a limited range of products.

The first Forum of the Outermost Regions was held in 2010, with the aim of increasing the regions’ visibility in Europe by highlighting their strengths and potential.

The ORs receive special funding allowances, over which local councils have had more control than their regional budget allocation.

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